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Sort through the wealth of information on the Internet to get what is pertinent to your investmentsMon, 19 Nov 2018 22:00:55 +0000en-UShourly1A bond and 2 best stocks to buy nowhttps://www.adviceforinvestors.com/news/dividend-stocks/a-bond-and-2-best-stocks-to-buy-now/
https://www.adviceforinvestors.com/news/dividend-stocks/a-bond-and-2-best-stocks-to-buy-now/#commentsSun, 18 Nov 2018 20:00:37 +0000https://www.adviceforinvestors.com/?p=7193Guy Lapierre, a Port Coquitlam, BC-based vice president at PI Financial, really likes Calgary-based Parkland Fuel Corp.’s six per cent bonds and two stocks—BCE for its dividend yield and Transcontinental for a niche play opportunity, especially with the fast-approaching holiday season.
As everyone and their mother could tell you, marijuana is now legal in Canada. Even
]]>Guy Lapierre, a Port Coquitlam, BC-based vice president at PI Financial, really likes Calgary-based Parkland Fuel Corp.’s six per cent bonds and two stocks—BCE for its dividend yield and Transcontinental for a niche play opportunity, especially with the fast-approaching holiday season.

As everyone and their mother could tell you, marijuana is now legal in Canada. Even so, Vancouver-area portfolio manager Guy Lapierre says he is far from ready to invest heavily in it. “I’m looking at ’em horrified,” says Mr. Lapierre, a vice-president at PI Financial, of marijuana stocks.

“It’s a straight valuation. I still see 50 per cent reductions in the retail price of marijuana,” he elaborates. “The entire system seems poised to prove the adage, ‘Buy the rumour, sell the news.’”

The portfolio manager argues that the retail market is finite and has already been roughly priced out, analyzed, and otherwise quantified by financial experts. In turn, investors have driven current cannabis stock prices so high up that they already account for potential recreational earnings. Accordingly, he says: “I can’t buy a position significantly at the price I want.”

Mr. Lapierre asserts that assigning a value to marijuana as a product is similar to doing so for beer or wine: users have subjective preferences, but often, consumer choice ultimately boils down to price point.

At the same time, he says: “There’s existing competition and that’s going to have to shake itself out.” Canadian producers are quickly ramping up operations and expanding their cultivation infrastructure. Since the federal government is unlikely to establish a ‘marijuana board’ akin to the former Canadian Wheat Board or Canadian Dairy Commission that would control prices, competition in retail cannabis will be fierce and push prices below sustainable levels. He urges caution and avoiding any marijuana stock purchase larger than a small, affordable, retail investor-type stake.

By contrast, Mr. Lapierre expresses greater interest in medical marijuana’s growth potential, calling attention to CBD-based treatments in particular, though he points out that his confidence in CBD (cannabidiol) is based on anecdotal, personal experience.

Since marijuana-related clinical research projects are now legal, novel medical uses for CBD will emerge, he predicts. However, he adds that he does not expect such treatments to receive approval from the US Food and Drug Administration or its Canadian counterparts in the next five years because the research studies are still in their infancy.

Mr. Lapierre’s interest is more income

Asked about interest rates, Mr. Lapierre says he is preparing clients for a one-percentage-point increase between this year and the end of 2019.

To that end, the portfolio manager says he has purchased short-to-medium-term fixed-income investments of two to five years’ duration, mostly corporate bonds, with the intent of holding them to maturity. “We’re using asset allocation to protect our principal . . . and as a result we’re underperforming (more aggressive portfolios), in the short-term.” Among his conservative growth clients, for example, he has shifted asset allocations toward a 50-50 split between equities and fixed-income assets, when the split is usually closer to 70-30 in favour of equities.

Given domestic opposition to pipelines and energy expansion, Mr. Lapierre says: “Whether or not you can get a project approved is more important than costing right now.

“That leads me to look at a company like Parkland Fuel Corp. (TSX—PKI)”, he continues, particularly its bonds. Parkland bonds were issued with a six per cent coupon and are yielding 4.9 per cent until 2022 (they are currently priced at a premium), reflecting their major expansion via the acquisition of Chevron’s Canadian assets, including a refinery, last year.

2 best stocks to buy now

As for stocks, Mr. Lapierre names BCE Inc. (TSX—BCE; NYSE—BCE) as one of his ‘best buys’, on the basis of its 5.9 per cent dividend yield, which, combined with preferred tax treatment, is attractive even relative to Parkland’s yield, fully taxed, he says.

Transcontinental found a niche (bilingual packaging for Canadian consumers of foreign goods) and has worked to cheaply fill the need by purchasing pulp and paper-related assets and packaging suppliers.

When shipping containers unload those goods, they must be switched over to packages that follow Canadian requirements. According to Mr. Lapierre, an abundance of specialty items arriving for the holidays will come in Transcontinental containers.

In the month since Sept. 15 alone, the company’s shares dropped 17.1 per cent, resulting in an attractive buying opportunity, the portfolio manager says.

We won’t see a similar pickup next quarter, as gas station sales rose through August and September and have been relatively flat in 2018. Beer, wine and liquor stores continue to show some growth, up 3.5 per cent. We’ll see if the legalization of recreational cannabis negatively impacts this number. Specialty food stores (up 5.5 per cent) continued to outperform grocery (up 0.8 per cent). This could benefit GreenSpace Brands Inc. (TSXV—JTR).

Used car sales are outperforming new car sales, up 10.5 per cent versus up 1.2 per cent. Most will need financing, which works in AXIS Auto Finance Inc.’s (TSXV—AXIS) favour. The implementation of tariffs by various countries against the US could benefit Canadian companies. Tariffs imposed on American whiskey could benefit Corby Spirit and Wine Ltd. (TSX—CSW.A).

Fortunately, the US imposing tariffs on a number of fish products processed in China will be a big benefit to High Liner Foods Inc. (TSX—HLF). The US Centers for Medicaid and Medicare Services (CMS) began to move away from a fee-for-service model toward a value based purchasing model. This was designed to make healthcare stocks focus more on efficient patient care that would reduce hospital re-admissions. We believe this move will benefit those service providers that can help with early diagnoses, like Akumin Inc. (TSX—AKU.U).

Cannabis stocks still lead the parade

But PI Financial’s ‘top pick’ is Alcanna Inc. (TSX—CLIQ). Alcanna was the top performer of our consumer products stocks, up 17.6 per cent. It beat the Consumer Discretionary index (down 8.4 per cent) and the Consumer Staples Index (down 2.7 per cent). The stock traded in the $9 to $10 range until the latter half of September when excitement over cannabis retailing finally took hold.

Management have said they want to open the maximum number of stores allowed in Alberta (37) and Ontario as well.

Alcanna’s market capitalization is about $360 million, so investors are getting all of Alcanna’s liquor business and its $24.7 million of operating margin for $85 million or 3.4 times earnings.

The next two years will bring about a lot of change, including accelerated Alberta store renovations, the launch of a retail cannabis business, a new discount banner (Deep Discount Liquor) and a new ERP (enterprise resource plan) system. For 2018, revenue of $624 million is expected, while adjusted operating profit should come in at $24.7 million. In 2019, we are forecasting revenue of $798.8 million and adjusted operating profit of $40.4 million.

iAnthus aims for new US markets

Another ‘top pick’ cannabis stock is iAnthus Capital Holdings Inc. (CNX—IAN). We have chosen iAnthus as our fourth-quarter ‘top pick’ as the company is on track for dispensary roll-out across the US in 2018. IAN currently owns five cultivation facilities and has licenses to operate up to 39 dispensaries.

Significant catalysts such as new recreational markets (New York for example) and regulation easements will further propel iAnthus’ revenue growth. iAnthus is set to capitalize on first-mover advantage.

Management has been actively pursuing US cannabis businesses as a public company since September 2016, giving them an early mover advantage and making them one of the most seasoned groups in the public markets.

As the state of Massachusetts began an adult-use cannabis program in July 2018, IAN moved rapidly and has opened its first flagship dispensary in Boston under the Mayflower banner.

We forecast revenue of $3.1 million, $54.3 million and $141 million, respectively, for fiscal 2018, fiscal 2019, and fiscal 2020. We estimate EBITDA of -$9.2 million, $9.1 million, and $37.6 million for fiscal 2018, fiscal 2019, and fiscal 2020 respectively.

And more yet to come

In anticipation of the legalization of recreational cannabis, a number of companies that want to become cannabis retailers have gone public and/or raised equity. They cannot open a store until after legalization, so estimating sales and earnings is challenging. Any money raised will be used for store fixtures and inventory.

Solo Growth, trading as Aldershot Resources Ltd. (TSXV—ALZ) and backed by Canopy Rivers (TSXV—RIV), wants to roll out cannabis retail in Alberta and Ontario. It has a fully diluted market cap of approximately $275 million.

]]>https://www.adviceforinvestors.com/news/healthcare-stocks/top-stock-picks-echoes-ongoing-pot-fascination/feed/02 tech stocks to buy for capital gainshttps://www.adviceforinvestors.com/news/us-stocks/2-tech-stocks-to-buy-for-capital-gains/
https://www.adviceforinvestors.com/news/us-stocks/2-tech-stocks-to-buy-for-capital-gains/#commentsWed, 31 Oct 2018 19:00:48 +0000https://www.adviceforinvestors.com/?p=7142The MoneyLetter recently took a look at two of the five so-called FAANG stocks (Facebook, Amazon, Apple, Netflix, and Alphabet’s Google) that have led the market higher in recent years. Apple and Netflix are both ‘buys’ for long-term share price gains and Apple is well on its way to becoming a dividend aristocrat.
Apple Inc. (NASDAQ—AAPL)
]]>The MoneyLetterrecently took a look at two of the five so-called FAANG stocks (Facebook, Amazon, Apple, Netflix, and Alphabet’s Google) that have led the market higher in recent years. Apple and Netflix are both ‘buys’ for long-term share price gains and Apple is well on its way to becoming a dividend aristocrat.

Apple Inc. (NASDAQ—AAPL) is one of the largest manufacturers of personal computers (such as the Macintosh), peripheral and consumer products. These include the iPod digital music player, the iPad tablet, the iPhone smartphone and the Apple Watch.

The company sells mostly to the business, creative, education, government and consumer markets. Apple also sells operating systems like iCloud storage and Apple Pay as well as a lot of digital content from the iTunes store and other portals.

In the year to Sept. 30, Apple is expected to earn US$11.76 a share. That would mark a 28 per cent jump from last year’s US$9.21 a share.

The forward-looking stock market, however, is focusing on the outlook for fiscal 2019. Apple’s earnings are expected to climb by 13.9 per cent, to US$13.40 a share. Based on this estimate, the shares trade at a P/E (Price-to-Earnings) ratio of 16.7 times. That’s reasonable for this highly profitable and diversified company. That’s likely why billionaire Warren Buffet bought it.

Apple began paying dividends in 2012 at US$0.38 a share. The company has raised its dividend each year since then, to US$2.92 a share today. Despite a 7.7-fold rise in the dividend, it yields a small 0.17 per cent. That’s because the shares have risen so much. In fact, that’s how Apple became the first US company to reach a market capitalization of US$1 trillion.

We expect Apple to continue to raise its dividend each year and eventually become a ‘dividend aristocrat’. In the US, this refers to companies that have raised their dividends for at least 25 consecutive years.

We also expect Apple to continue to repurchase its shares. After all, it generates more cash flow than it needs to fund its research and development and its capital investment.

It rewards its shareholders in two ways. Most important, the company raises its dividend every year. It also buys back its own shares. In fiscal 2012, Apple’s share count peaked at 6.575 billion. Since then, it has repurchased its shares every year. The share count is now down by over a quarter, to 4.915 billion.

Spreading the earnings over fewer shares raises Apple’s earnings per share, of course. All else being equal, this justifies a higher share price. Meanwhile, growing dividends attract income-seeking investors who can bid up Apple’s share price. It remains a buy for further long-term share price gains and modest, but growing dividends.

Buy Netflix for share price gains

Netflix Inc. (NASDAQ—NFLX) is the world’s largest Internet television network. At last count, it served 130.1 million streaming members in over 190 countries. Since June 30, the company also rents DVDs to its members in the US.

Netflix is growing quickly. In 2018, it’s expected to earn $2.67 a share. That’s more than double the $1.25 a share that it earned last year. Based on this year’s estimate, the stock trades at a high P/E (Price-to-Earnings) ratio of 133.2 times. The thing is, the forward-looking market’s focus is shifting to expectations about next year. In 2019, Netflix’s earnings are expected to jump by 60 per cent, to $4.27 a share. Based on this estimate, the stock trades at a better, but still-high, P/E ratio of 83.3 times.

Fast earnings growth can justify a higher P/E ratio. The trouble is, stocks can become what’s known as ‘priced for perfection’. That is, the market’s expectations become so high that it’s difficult for a stock to meet these expectations. If it does very well, but less well than the market expected, the share price can plunge. The stock market is, of course, erratic and unpredictable. It puts ‘fallen angels’ in the ‘doghouse’ for a while.

One positive aspect about Netflix is that it generates recurring and dependable cash flow. Subscribers around the world pay modest monthly fees for access to its offering of popular TV series and movies. This gives the company the money to continue to expand its business.

Competitors are springing up to try to eat some of Netflix’s lunch. These include Amazon.com, HBO and Hulu, among others. Analyst Robert Harrington wrote, “. . . new products are liable to threaten [Netflix] as well. Specifically, Disney’s impending launch of an ‘over-the-top’ product could pose a notable challenge. The House of Mouse is pulling its films and television shows from Netflix in anticipation of its proprietary product’s introduction.”

On the positive side, Netflix is producing more content of its own. For instance, it recently increased its 2018 programming spending from $8 billion to $13 billion. Netflix has won many Emmy nominations. This in-house production exclusively for its members can help Netflix compete against its rivals.

Netflix is a buy for long-term share price gains, if you need no dividends.

This is an edited version of an article that was originally published for subscribers in the October 2018/First Report of The MoneyLetter. You can profit from the award-winning advice subscribers receive regularly in The MoneyLetter.

]]>https://www.adviceforinvestors.com/news/us-stocks/2-tech-stocks-to-buy-for-capital-gains/feed/0Coca-Cola acquisition adds a caffeine buzzhttps://www.adviceforinvestors.com/news/us-stocks/coca-cola-acquisition-adds-a-caffeine-buzz/
https://www.adviceforinvestors.com/news/us-stocks/coca-cola-acquisition-adds-a-caffeine-buzz/#commentsTue, 30 Oct 2018 19:00:41 +0000https://www.adviceforinvestors.com/?p=7139The Coca-Cola Company, which long ago ceased using cocaine in its eponymously-named soft drink, is in decline. It’s now looking to caffeine to put a buzz back into its business by paying $5.1 billion to acquire the United Kingdom’s leading coffee chain, Costa Coffee.
If you are of a certain age, the very thought of an
]]>The Coca-Cola Company, which long ago ceased using cocaine in its eponymously-named soft drink, is in decline. It’s now looking to caffeine to put a buzz back into its business by paying $5.1 billion to acquire the United Kingdom’s leading coffee chain, Costa Coffee.

If you are of a certain age, the very thought of an American beverage giant seeking to resurrect its business growth with English coffee is mind-bendingly perplexing. But that was then, and this is now and Coca-Cola is is spending $5.1 billion for a ‘cuppa’ English coffee.

The incidence of obesity and diabetes has climbed around the world in recent years. Some believe that this reflects diets laden with sugar and a lack of physical activity. They see traditional soft drinks as part of the problem. As increasingly health-conscious consumers shift away from soft drinks, the world’s largest soft drink company has felt the impact in its results.

Coke’s sales peaked at $48.017 billion in 2012. They’ve fallen ever since. By 2017, the company’s sales had sagged by more than 26 per cent, to $35.410 billion. Its sales are expected to fall by more than 10 per cent in 2018, to $31.750 billion.

But The Coca-Cola Company (NYSE—KO) is adjusting to changing conditions and we’ve upgraded its shares to a buy for long-term share price gains as well as high and growing dividends.

Coke’s old soft drink business is declining

For a while, Coke bought back shares to raise its earnings per share. (Spreading the earnings over fewer shares increases the earnings per share, of course.) In fact, the company has repurchased shares every year since 2007. By 2017, it had reduced its share count by 377 million.

As sales and earnings declined, even share buybacks couldn’t offset the impact on Coke. Its earnings per share peaked at $2.08 a share in 2012. While the company has continued to raise its dividend each year, the payout ratio went up. Rising dividends become less secure as they account for a larger percentage of the declining earnings.

Coke writes: “Coffee is a significant and growing segment of the global beverage business.” Coke president and chief executive officer James Quincey said: “Hot beverages is one of the few segments of the total beverage landscape where Coca-Cola does not have a global brand.”

That’s why Coke has agreed to pay $5.1 billion to buy Costa Coffee from Whitbread PLC. [Mr. Quincey is a British businessman now living in the US. Maybe that helps explain Coca-Cola’s insight into the quality of English coffee in 21st century Britain.]

Costa currently operates nearly 4,000 retail outlets. These are mostly in the UK, where it’s “the leading coffee company”. Coke writes that Costa will give it “a strong coffee platform across parts of Europe, Asia Pacific, the Middle East and Africa, with the opportunity for additional expansion”. For instance, Costa has a “growing footprint in China, among other markets”. But Costa faces many competitors.

Starbucks Coffee and McDonald’s Corp. already have larger international markets. There are also well-entrenched regional players such as Tim Hortons in Canada and Dunkin’ Donuts in the US. Its likely that many of the markets that Costa covets are already served.

Costa is diversifying into other parts of the business. For instance, its retail outlets have “highly-trained baristas”. It also operates a coffee vending operation, a for-home coffee format and Costa’s “state-of-the-art roastery”. Costa Express sells “barista-quality coffee” in locations such as gas stations, movie theaters and travel hubs.

How Costa is doing financially

Coke expects to complete the acquisition of Costa Coffee in the first half of 2019. As a result, the transaction will not add anything to Coke’s results this year. But it will contribute in the year ahead.

Costa Coffee did well in fiscal 2018, which ended on March 1. Costa generated revenue of $1.7 billion. It also produced EBITDA of $312 million. (EBITDA stands for Earnings Before Interest, Taxes, Depreciation and Amortization. Some investors use it to assess a company’s underlying profitability.)

Coke expected Costa to add to its earnings in the first full year. But only if you exclude one-time impacts for purchase accounting.

To its credit, Coke is responding to market shifts. We’ve upgraded it to a buy for long-term share price gains and growing dividends that yield 3.3 per cent.

This is an edited version of an article that was originally published for subscribers in the October 5, 2018, issue of The Investment Reporter. You can profit from the award-winning advice subscribers receive regularly in The Investment Reporter.

]]>https://www.adviceforinvestors.com/news/us-stocks/coca-cola-acquisition-adds-a-caffeine-buzz/feed/02 best ETFs to buy right nowhttps://www.adviceforinvestors.com/news/tech-stocks/2-best-etfs-to-buy-right-now/
https://www.adviceforinvestors.com/news/tech-stocks/2-best-etfs-to-buy-right-now/#commentsSun, 28 Oct 2018 19:00:47 +0000https://www.adviceforinvestors.com/?p=7130The peak six months of market activity has arrived, and seasonal investing analyst and portfolio manager Brooke Thackray picks the two sectors—and names two specific ETFs—that he’s targeting to rotate funds into.
If you are searching for a rewarding relationship (to yourself, if not necessarily to each other), go no further than the ‘odd couple’ of
]]>The peak six months of market activity has arrived, and seasonal investing analyst and portfolio manager Brooke Thackray picks the two sectors—and names two specific ETFs—that he’s targeting to rotate funds into.

If you are searching for a rewarding relationship (to yourself, if not necessarily to each other), go no further than the ‘odd couple’ of consumer staples and technology stocks in October. So says Brooke Thackray, a Toronto seasonality-based financial analyst and author of an annual eponymous book series, Thackray’s Investor’s Guide, coming out in late November.

Despite the myriad differences between the two sectors, including their reasons for drawing market interest, both are historically strong in October, making them a perfect match for a seasonal investor’s portfolio, he explains.

As the peak six months of market activity approaches, the analyst is preparing to rotate HAC’s holdings. (The market’s top-performing period typically begins around Oct. 28 and lasts until May 5, based on historical data.)

“Right now, we have a lot of cash on hand that we’re starting to put to work but we’re expecting to be substantially more invested by the end of October,” says Mr. Thackray.

Commenting on consumer staples, the analyst notes that the sector in the United States had underperformed the S&P 500 through the first half of 2018. However, in June, the sector began to turn around. Since July, it has slightly outperformed the S&P 500.

In anticipation of volatility from summer into October, “investors themselves are looking for companies that are more defensive. For us, this is a good setup. It’s a good sector to be in at this time when the market is trying to figure out what to do,” says the analyst.

Market leader just reaching its peak period

As for Mr. Thackray’s case for the technology sector, he points out: “It’s been a market leader for a while . . . and here we are coming up to its really strong seasonal period.”

Technology stocks tend to do best from Oct. 10 or so through the end of November. Many businesses examine IT-related purchases at the end of the year, to say nothing of consumer interest leading up to Christmas. “The idea is to be out on technology when there’s a lot of excitement.”

Mr. Thackray advises investors to avoid energy stocks in the fall since they generally perform poorly at this time, particularly oil stocks. In fact, because of the energy sector’s prominence in the Canadian stock markets, the analyst recommends avoiding Canadian investment altogether over the autumn months.

“Nobody’s picking on Canada,” he says, but he gives little weight to speculation that oil prices could reach US$100 a barrel, and buoy up the local economy, because of sanctions on Iran.

The conclusion of North American Free Trade Agreement negotiations and the emergence of its successor, the United States-Mexico-Canada Agreement, on Oct. 1 are unlikely to spur domestic capital markets or the economy, Mr. Thackray adds.

“So far the stock market hasn’t reacted with enthusiasm. I don’t expect any change at all actually.” He says the new agreement’s terms are less favourable for Canada than the previous one. “The deal doesn’t help the stock market other than providing some clarity on capital spending.” Lower uncertainty may result in the Bank of Canada raising interest rates, which would further dampen stock market growth, the analyst argues.

2 best ETFs to buy right now

Mr. Thackray says: “The funds I work with, we generally buy sectors of the market, so we buy ETFs.” Accordingly, he names the SPDR Consumer Staples Select Sector Fund (NYSEARCA—XLP) and the SPDR Technology Select Sector Fund (NYSEARCA—XLK) as his ‘best buy’ picks for US exposure.

However, Mr. Thackray stresses: “The technology trade would be longer, but in this case, it would only be for the month of October.” The technology SPDR’s assets are also made up of major firms like Microsoft Corp., Apple Inc., Intel Corp., and Cisco Systems Inc.

Mr. Thackray says: “We’ve seen rapid outperformance over the last couple of years. Technology stocks have outperformed outside of their seasonal period as we’ve had a structural change to the marketplace.”

Since June, the sector has settled down somewhat and performed in line with the broader market. “It’s an expensive sector, but it’s the leading sector of the market,” says the analyst. XLK offers a 1.27 per cent dividend yield.

Rescuing cyclical consumer stock Cineplex Inc.’s (TSX—CGX) 2018 second quarter, The Avengers along with other cinematic heroes were able to boost box office revenues. Cineplex reported a strong quarter for 2018, on the back of a strong film slate.

Toronto-based Raymond James Financial analysts Kenric Tyghe and Joanna Chmiel give this entertainment industry stock an ‘outperform’ rating but decrease their target share price to $36 from a previous $39.

“Cineplex’s second-quarter 2018 box office revenue growth of 12.4 per cent to $409.1 million reflected strong industry performance on key titles in the quarter. Box office revenue growth was supported by a five per cent increase in attendance and a 4.4 per cent increase in ticket.

“Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $67.8 million (a 613 basis point margin improvement to 16.6 per cent) reflected better-than-expected sales leverage on higher than expected revenues in the quarter. EPS of $0.38 came in well above consensus of $0.25.

“The solid performances of Ant-Man and the Wasp, Hotel Transylvania and Mission: Impossible – Fallout have driven quarter to date Canadian box office growth in excess of industry growth of one per cent. The performance quarter to date is incrementally positive in our opinion given that August 2017 was a disaster at the box office.

Q3 film releases should be solid hits

“The film slate in the third quarter is solid with the releases of Crazy Rich Asians, and the anticipated releases of The Nun, and The Predator set to release in the remainder of the third quarter of 2018. The very weak third-quarter 2017 performance was largely driven by an awful August 2017, and as such, we like the setup going into the back half of the quarter.

“While relative attendance growth in Canada (on a slate equivalent basis) is lagging that of the US (where traffic is being inflated by the Movie Pass effect), that we now have one more quarter of box office growth and another positive earnings surprise is, in our opinion, a positive. Further, we expect the relative box office performance (and the tracking error) to normalize and recent changes in the Movie Pass program to negatively impact US box office traffic.

“Lastly, while the strength of the box office performance was significant, we believe that the benefits from the diversification strategy were noteworthy. The margin performance continues to benefit from both recently announced costs savings, which are tracking to plan ($25 million in run-rate annual cost savings within 12-months), and more effective utilization of the SCENE loyalty program, which will continue to ramp through our forecasted window.”

]]>https://www.adviceforinvestors.com/news/consumer-goods-stocks/cineplex-mission-possible-after-avengers-win/feed/05 adapting retail stocks to buy nowhttps://www.adviceforinvestors.com/news/us-stocks/5-adapting-retail-stocks-to-buy-now-2/
https://www.adviceforinvestors.com/news/us-stocks/5-adapting-retail-stocks-to-buy-now-2/#commentsWed, 26 Sep 2018 18:58:15 +0000https://www.adviceforinvestors.com/?p=7017Now that you actually can have breakfast at Tiffany, and that you’ll soon be able to walk into a store and buy marijuana, you might ask yourself what surprises the retail sector has in store for you next. If your answer is a better ROI on your stocks than last year, your prayers might just
]]>Now that you actually can have breakfast at Tiffany, and that you’ll soon be able to walk into a store and buy marijuana, you might ask yourself what surprises the retail sector has in store for you next. If your answer is a better ROI on your stocks than last year, your prayers might just be answered.

2017 was by any measure an annus horribilis for the retail industry. You’d be hard pressed to find a retailer who had an even decent year. In the US, about 7,000 stores were shuttered, led by Walgreens (600) and Kmart and Sears (300). Bankruptcies were up considerably, and included established names such as Toys ‘R’ Us and Radio Shack. In Canada, Sears Canada, Danier Leather and Gymboree all closed shop.

But if it was a wobbly year for retailing, it was an even shakier year for retailers. Most felt under siege, on the one hand responding to the significant migration of brick and mortar consumer to online shopping, and on the other, understanding that the in-store experience had to be richer, with less emphasis on shopping, and more emphasis on entertainment, hospitality and community.

The buzzword was—and remains—‘experiential’. (Given the wide media attention to shoppers’ migration to cyberspace, it is interesting to note that online purchases account for only 10 per cent of total retail sales.) But not every retailer has the savvy to personalize and curate merchandise the way shoppers want. And how many retailers can match the experience of the NFL Experience in Times Square, which allows a fan to suit up and call plays like Tom Brady.

(NOTE: While Starbucks has never been a contrarian, it’s interesting to note that it took down its online store in the fall of 2017, with Chairman Howard Schultz noting that: “Every retailer that’s going to win in this environment must become an experiential destination. Your products and services, for the most part, cannot be available online or on Amazon.”)

Despite the disruption and hand wringing, a good number of analysts have a positive outlook for many consumer goods stocks—for 2018 and beyond. While retailers must adapt to a changed industry and changing shopping habits, some see the months ahead as a period of transition, with the ability to make the transition dependent on a retailer’s resources, agility and commitment. Analysts, however, also feel that many retailers will adapt and succeed in the new environment, success that will translate into meaningful ROI on their stocks.

But before The MoneyLetter gives you a snapshot of retailers that represent a ‘Buy’ opportunity, we’d like to highlight some of the major trends re-shaping the retail industry. Being aware of those trends will help you determine if the management of a particular retailer is embracing and implementing change in a disrupted environment.

Trends re-shaping the retail industry

1. What’s in store for you? Retailers moving the dial on the in-store experience have already realized that a store has to be more than a store. For example, whether they are in a stand-alone location or a department store, Nespresso customers can inhale the atmosphere, discover the latest coffee machines and participate in a tasting session, or just relax and very slowly sip a double espresso.

2. The use of artificial intelligence is growing. Its ability to affect a buying decision positively is proven. For example, through augmented reality, a shopper can see how a suite of furniture would look in their living room. Sensors on shelves that can read shoppers’ faces and machine learning software that can optimize prices are some other applications of artificial intelligence.

3. So too is the use of analytics. Customer preferences change—either in a moment or over time. Collecting the data and culling the right insights from the data—on say, a shift in colour preferences—enables a retailer to respond and have the right product on the shelf at the right time. Any retailer worth its salt—and stock price—has just got to have data scientists on its staff.

4. Emergence of ‘direct to consumer’ (DTC). Having control over how a product is priced, merchandised and sold are extremely important to a brand’s success. While not necessarily new (e.g., Polo), more and more brands are moving out of department store and into their own stand-alone locations. This is the DTC model. For example, Canada Goose has brick and mortar locations in Toronto, New York, Chicago and Tokyo. Recently, it raised its earnings forecast based, in part, on the success of its DTC strategy.

5. Omni-channel retailing: The newest, most comprehensive model replaces multi-channel retailing and delivers a seamless shopping experience, whether customers are shopping on a desktop, mobile device, telephone or in a brick and mortar store. It is the ultimate in shopping efficiency and convenience, and the most forward—and profitable—retailers are adopting the model almost as fast you can click ‘Buy’.

Neither exhaustive nor comprehensive, the list below contains names that regularly show up on many analysts’ ‘Buy’ lists. They are listed below in no particular order.

Walmart should rebound from sell-off

Multinational retail stock Walmart Inc. (NYSE—WMT) presents a good buying opportunity, especially after its recent 10 per cent post-earnings sell-off. While e-commerce sales slowed and profit turned lower in the latest quarter, the company had its best two-year comparable sales growth in eight years. It still holds to its online sales growth of 40 per cent for the current year and plans to double the number of online grocery pick up stations to 2,000. The program has been the biggest driver of the company’s e-commerce growth in recent years. Walmart also sees 2018 EPS of $4.75 to $5.00, up from $4.42, and a dividend yield of 2.4 percent.

Alimentation Couche-Tard still growing

Now the world’s second-largest convenience store operator, Couche-Tard (TSX—ATD.B) appears to be an earnings growth story that still has lots—and lots—of room to grow.

Once it unlocks the full synergy potential from its recent CST Brands and Holiday acquisitions, there’s little question that management will pull the trigger on more deals, while keeping its debt under control. With the company’s reputation for integrating acquisitions successfully, and those acquisitions’ history of producing significant value over the long term, the shares could well be the cheapest they’ve been in years—and a ‘Buy’.

Kohl’s stand-alone preference paying off

US department store retail chain Kohl’s Corporation (NYSE—KSS) is known for its near-flawless execution, a reputation it recently enhanced by reporting comparable-sales growth of 6.3 per cent, while reducing inventory by 7 per cent. Kohl’s prefers stand-alone locations, and the strategy has enabled it to buck declining mall traffic. In fact, in-store traffic has increased, a rare feat for a retailer these days. It’s making smart moves like devoting excess store space to partner businesses and testing a shop-in-store partnership with Amazon. It sees EPS improving to $3.95-$5.45 this year, and at the top end of that range, the stock trades at a P/E ratio of just 12.

Dollarama has not reached saturation point

Investors and observers have been waiting for dollar-store retailer Dollarama (TSX—DOL) to stumble for some time. But with each earnings release, it looks less and less likely. Fourth quarter results released in April saw diluted net earnings surge 17 per cent during the quarter and sales increase by almost 10 per cent over the same period last year. Comparable-store sales also increased by a healthy 5.5 per cent over and above the 5.8 per cent increase last year.

Store growth has always been an important goal for Dollarama and in the most recent quarter the company opened 25 net new stores—one fewer than in the same period last year. Dollarama has proven that the saturation point raised by many critics is far off, if it will be reached at all. Despite the fact that several dollar-store competitors plan to expand into the Canadian market, Dollarama’s stock prospects look very favourable.

Canada Goose flying south—and east, and west

Come late November, it’s hard not to see a parka without consumer goods stock Canada Goose’s (TSX—GOOS; NYSE—GOOS) logo on the sleeve. It’s not only ubiquitous but also a status symbol for all demographic groups, from toddlers to seniors. Despite what seems to be the overnight emergence of an upstart brand, the Canada Goose story is actually 60 years old. It’s only in the last ten years or so, that savvy marketing and merchandising has made the company’s parka a virtual sign of belonging. To drop that overused word, the brand has become ‘iconic’.

The $400 million company, which has 6 stand-alone stores and whose products are sold in 87 countries, either in stores or online, has just taken a big step to becoming a one billion dollar concern by announcing that it will open two stores and launch an e-commerce site in China. Canada Goose has sold its products through retailers in China for five years; it has already implemented the direct-to-consumer model in 5 other countries.

According to one analyst, Canada Goose has already sold out its products in China; the analyst believes that the market there could ultimately be as large as the one in the United States. That goal seems eminently attainable, given the literally pent-up demand for its products, and the fact that the company has formed alliances with internet giant Alibaba and Imagine X, a division of high-end fashion retailer Lane Crawford Joyce Group. Imagine X will run and staff the Canada Goose-owned stores in China.

Another reason followers like it is that the company recently announced that it will move an additional 30 per cent of manufacturing in-house from off shore. About 60 per cent of manufacturing is now done in Canada Goose factories. Like the direct-to-consumer sales channel, the move further increases the company’s ability to control its brand and the quality of its products.

While Canada Goose’s stock has more than doubled since last year, and prospects for increased sales appear excellent, it should be noted that the stock trades at more than 35 times book value and over 10 times sales. The stock is very expensive, which is why several analysts suggest waiting till it has come back to earth to invest new money. However, most analysts love the stock and predict that it will appreciate significantly in the immediate few years.

Stephen Bernhut is a Toronto investment writer.

This is an edited version of an article that was originally published for subscribers in the June 2018/First Report of The MoneyLetter. You can profit from the award-winning advice subscribers receive regularly in The MoneyLetter.

]]>https://www.adviceforinvestors.com/news/us-stocks/5-adapting-retail-stocks-to-buy-now-2/feed/03 oil & gas stocks to buy nowhttps://www.adviceforinvestors.com/news/oil-and-gas-stocks/3-oil-gas-stocks-to-buy-now-2/
https://www.adviceforinvestors.com/news/oil-and-gas-stocks/3-oil-gas-stocks-to-buy-now-2/#commentsThu, 20 Sep 2018 18:58:33 +0000https://www.adviceforinvestors.com/?p=7009PI Financial portfolio manager Guy Lapierre picks three oil and gas stocks and a sugar producer as his ‘best buys’. [ed.--How did a sugar producer get in with his oil and gas picks? Well, it is an energy stock of sorts, isn’t it?]
Before last winter’s correction hit, Vancouver-area PI Financial portfolio manager Guy Lapierre cautioned
]]>PI Financial portfolio manager Guy Lapierre picks three oil and gas stocks and a sugar producer as his ‘best buys’. [ed.--How did a sugar producer get in with his oil and gas picks? Well, it is an energy stock of sorts, isn’t it?]

Before last winter’s correction hit, Vancouver-area PI Financial portfolio manager Guy Lapierre cautioned investors to be careful not to burn themselves by hanging on to high-flying (especially US) blue-chip stocks for too long. At the time, the markets were still looking forward to better corporate earnings across the board.

A week after he shared his views in our pages, in late January, the market had transformed into the shakier animal that it is today. So, what now?

“Broadly speaking, our reaction to the market changes since we last spoke is, we’ve been looking to protect any profits,” says Mr. Lapierre.

Specifically, he has adjusted exposure to equity by 10 per cent in the portfolios he devises for his clients in favour of more fixed-income investments. At present, his growth portfolio is made up of 60 per cent equities and 40 per cent fixed income, while his growth and income portfolio consists of an even split between equities and fixed income.

Summing up his more defensive position at present, the portfolio manager says: “Fixed income is about getting your money back. Equity is about growth.”

Time to add some fixed-income securities

Mr. Lapierre points out that interest rates have risen over the last four months to five months, increasing his willingness to take on some longer-term fixed income investments, although he adds that he has avoided any bonds with a term five years or longer.

“That leaves us a little lighter on cash . . . but we’re quick to take profits on the equity side.

“We did some active trading with Apple, and we have some long-term positions that are still very profitable to sell, but not as profitable as eight months ago.”

Thus, he has added major corporate bonds yielding between four per cent and 4.5 per cent annually to his clients’ holdings, which the portfolio manager describes as an acceptable return under current circumstances. Mr. Lapierre has also invested in mortgage-backed securities yielding from seven per cent to 7.5 per cent annually.

The portfolio manager urges investors to pay attention to the ease of exiting from any fixed income investments they take on. “First and foremost is liquidity.”

The recent mortgage-backed securities that he bought into, for example, may be completely sold back to the issuer if necessary. “At a discount, of course, but we can get our money out.”

The greenback is still king

Mr. Lapierre notes as well that he is betting on an overall rise in the US dollar against other major currencies, including the loonie. International trade conflict or inflation would buoy the currency upwards, he says.

“There is no place to go. In a trade war, arguably the strongest hand is played by the Chinese.” However, the euro and yuan are both vulnerable, the portfolio manager argues. As such, he says, “We are proponents of the king dollar.”

As for gold (and its miners), he says: “We see gold as disconnected from inflation.” Mr. Lapierre asserts that gold price changes generally reflect shifts in the value of the US dollar rather than supply and demand issues specific to gold.

“I don’t see gold as a holder of wealth. There’s just too many other commodities you can trade like gold.”

3 oil stocks and . . . a sugar producer

Looking ahead over the next quarter to half-year, Mr. Lapierre says: “We’re constructive on select Canadian oil companies, the US retail banking sector, water in general, and the German economy in specificity.”

Explaining his endorsement of Pembina, he says: “It’s summed up in the absence of a pipeline to Tidewater.” The company’s pipelines are doing brisk business and its dividend yields 5.31 per cent, with little debt to hamper it. “We’ve added AltaGas, Pembina Pipeline, and Suncor Energy Inc. (TSX—SU; NYSE—SU), reflecting the strength in oil prices, partially attributable to Middle East tensions rising. These three fossil fuel investments provide significant dividend income.”

Regarding Rogers Sugar, a long-time, “high-conviction pick” for Mr. Lapierre, he notes that the company’s yield has become even sweeter since dropping about 22 per cent from a peak share price of $6.29 on Jan. 2. Since he was happy to recommend Rogers Sugar when it was more expensive, the portfolio manager says simply: “It’s cheaper, so we like it.”

(Disclaimer: Mr. Lapierre held no positions in any stocks named above at the time of writing.)

]]>https://www.adviceforinvestors.com/news/oil-and-gas-stocks/3-oil-gas-stocks-to-buy-now-2/feed/05 Canadian conglomerate stockshttps://www.adviceforinvestors.com/news/growth-stocks/5-canadian-conglomerate-stocks-2/
https://www.adviceforinvestors.com/news/growth-stocks/5-canadian-conglomerate-stocks-2/#commentsWed, 19 Sep 2018 18:58:52 +0000https://www.adviceforinvestors.com/?p=7007ValueTrend portfolio manager Keith Richards (valuetrend.ca) takes note of five of the larger conglomerate stocks in Canada. He offers a brief bio of their divisions, and (of course!) a technical view of the stock. He’s bullish on two, neutral on two and bearish on one.
Conglomerate stocks appeal to some long-term investors because of their diversified
]]>ValueTrend portfolio manager Keith Richards (valuetrend.ca) takes note of five of the larger conglomerate stocks in Canada. He offers a brief bio of their divisions, and (of course!) a technical view of the stock. He’s bullish on two, neutral on two and bearish on one.

Conglomerate stocks appeal to some long-term investors because of their diversified holdings. Some conglomerates have holdings that are so different that they act much like a diversified mutual fund or ETF—only without the fees, and often with a management team holding significant skin in the game.

That doesn’t mean that all conglomerates are worthy of being held. A bad management team that overpays for underperforming assets, or that makes a series of incorrect calls on market trends can lead the company astray.

Below, I take note of five of the larger conglomerates in Canada. I’ll offer a brief bio of their divisions, and (of course!) a technical view of the stock. Given that such stocks should be owned for a long term, I’ll only look at patterns on the weekly charts. Near-term timing signals will be of less significance in this summary.

BULLISH: Brookfield Asset Management

Brookfield Asset Management (TSX—BAM.A) is a financial stock that we’ve held for a while in the ValueTrend Equity Platform. The company operates in eight divisions. Many of these divisions have been split off into separate stocks and are by themselves fairly diversified. As such, BAM.A is considered a bit of a hard stock to analyze from a fundamental analyst’s perspective. Technical analysis to the rescue!

Its price chart shows us a shallow, yet obvious uptrend since 2015. It’s coming off of its trendline and breaking through near-term resistance as I write. This inspired me to put it on my BNN Top Picks on the last show.

BULLISH: Fairfax Financial Holdings

We own this financial stock in the ValueTrend Equity Platform as well. Like BAM.A, it’s a Top Pick for my BNN appearances. FFH Fairfax Financial Holdings (TSX—FFH) is diversified in different areas including Investment Management, Insurance and some exposure to India. Prem Watsa tends to act a bit like a hedge fund manager in buying ‘cheap’ assets and waiting it out to realize value. He also hedges things like inflation, etc. Because of that, it might be a little non-correlated to the market, should you be concerned of a market correction. The breakout through $700 targets $780 for the stock.

NEUTRAL: Onex Corporation

If you can’t remember financial stock Onex’s stock ticker (TSX—ONEX), there’s no hope for you. Another jack-of-all trades, Onex owns companies in Electronics, Healthcare, Building Products, Insurance, Packaging, Food, and other small diversifications. Peter Lynch used to say that such massive diversification could sometimes lead to “di-worsification”. Perhaps he was right. This stock was in an uptrend until mid-2017. Then, it took a pretty good hit on the chin, and is now struggling through a basing phase. I wouldn’t buy this stock until it stays above $96 for a while.

NEUTRAL: Power Corporation of Canada

While we don’t hold financial stock Power Corporation of Canada (TSX—POW) in our Equity Platform, we do own one of its divisions, Power Financial Corporation (TSX—PWF) in our more passive, dividend-orientated Income Platform (5% + dividend). The price charts illustrate why we don’t think of POW, or PWF for that matter, as growth stocks. The chart is choppy, with no real direction as to future upside. POW holds financial interests in Canada (IGM Financial Inc. and Great-West Lifeco Inc.) while also holding some European interests in minerals, cement, oil and gas and alternative energy sectors.

BEARISH: George Weston Limited

Consumer stock George Weston Limited (TSX—WN) holds a variety of food services including bakery and grocery, as well as pharmaceutical services, asset management, apparel, financial & insurance, wireless, and property management. This stock peaked in 2007. Since then it has been in a downtrend, as illustrated by its weekly chart’s consistently lower highs and lows. The stock has not begun to base yet. It should be avoided for the time being, unless you are a near-term swing trader. The trend is not your friend here.

Keith Richards, Portfolio Manager, can be contacted at krichards@valuetrend.ca. He may hold positions in the securities mentioned. Worldsource Securities Inc., sponsoring investment dealer of Keith Richards and member of the Canadian Investor Protection Fund and of the Investment Industry Regulatory Organization of Canada. The information provided is general in nature and does not represent investment advice. It is subject to change without notice and is based on the perspectives and opinions of the writer only and not necessarily those of Worldsource Securities Inc. It may also contain projections or other “forward-looking statements.” There is significant risk that forward looking statements will not prove to be accurate and actual results, performance, or achievements could differ materially from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements and you will not unduly rely on such forward-looking statements. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please consult an appropriate professional regarding your particular circumstances.

This is an edited version of an article that was originally published for subscribers in the June 2018/Second Report of The MoneyLetter. You can profit from the award-winning advice subscribers receive regularly in The MoneyLetter.

]]>https://www.adviceforinvestors.com/news/growth-stocks/5-canadian-conglomerate-stocks-2/feed/0Technical analysis and trading strategyhttps://www.adviceforinvestors.com/news/us-stocks/technical-analysis-and-trading-strategy/
https://www.adviceforinvestors.com/news/us-stocks/technical-analysis-and-trading-strategy/#commentsWed, 05 Sep 2018 18:58:34 +0000https://www.adviceforinvestors.com/?p=6968This market is not an easy one for investors. What worked yesterday may cause damage today. Yesterday’s dogs, on the other hand, can become tomorrow’s heroes. You need to watch for a new wave of sector rotation. ValueTrend portfolio manager Keith Richards says chart formations and volume trends will help you spot the beginnings of
]]>This market is not an easy one for investors. What worked yesterday may cause damage today. Yesterday’s dogs, on the other hand, can become tomorrow’s heroes. You need to watch for a new wave of sector rotation. ValueTrendportfolio manager Keith Richards says chart formations and volume trends will help you spot the beginnings of those rotations.

Through my articles with The MoneyLetter, I have long recommended that readers consider using a trading strategy utilizing various methodologies for technical analysis. As I have often noted to readers: Everyone is a hero in a bull market. It’s the bear markets that separate the competent investors (and money managers) from the wanna-be’s.

It is in the current sideways market that you must be proactive and willing to trade. Buying and holding doesn’t work in a choppy market. Sideways markets, as we have been stuck in since the beginning of the year, usually involve sector rotation. Stocks and sectors that were hot become unfavorable, and vice versa. You must learn to move between these sectors in a logical and profitable manner, or hire someone who knows how to do it for you. Buy-and-hold managers are not going to help you at this time.

Trading in a volatile market

By the way, I am always willing to share my strengths and weaknesses with investors. And I must say that my strength has always been in trading through a choppy market period as we are experiencing now. My weakness lies in years with below-average volatility like 2017, where a systematic approach adds no value. In those types of years, stocks go up with no pause or consideration of valuation. Other parabolic years for the market were in 1999 and 2007.

Fortunately, that type of market (i.e. 2017’s parabolic move) is rare. Most years, markets either climb a choppy wall of worry via an uptrend, or consolidate in some type of yo-yo pattern, or decline in a choppy downtrend. These are all scenarios where a trading philosophy like my own will give you an edge over buy and hold.

A choppy market is created when investors concentrate on certain sectors, then leave those sectors to rotate into new sectors quickly. For example, the first crack in the FAANG stocks (Facebook, Amazon, Apple, Netflix and Google (Alphabet)) showed up in the July quarterly report from Netflix (NASDAQ—NFLX). The stock went down about 10% overnight. This was followed by a subsequent crack in Facebook’s (NASDAQ—FB) July quarterly report leading into a similar double-digit decline for that stock. Keep an eye on the entire FAANG group, and the NASDAQ in general from this point forward. This could be the warning shot across the bow for investors. I believe that the party may be slowing for the FAANGs, and a new rotation of the guard may be beginning.

To find the new rotational candidates, you need to watch the underdogs, wait for them to break out and then POUNCE! Below are a few candidates that you can add to your watch list as potentially attractive upcoming trades.

■ Canadian banks: The banks are out of favour right now due to the declining prospects of the Canadian economy and our prospects of coming out well in the trade deals. But remember, “the time to buy is when there’s blood in the streets”, as Barron Rothschild once said. Seasonally it’s usually best to buy banks in the early part of October. I’m watching the BMO Equal Weight Banks Index ETF (TSX—ZEB) and individual banks for a potential entry point in the fall. We have a couple of Canadian banks right now, but would add to our exposure in the fall if things turn bullish. Right now, they are trading fairly flat, as the ZEB ETF indicates.

■ Consumer Staples: The US staples have been hammered over the past 18 months. This sell-off has vindicated my decision to sell Mondelēz International Inc. (NASDAQ—MDLZ) back in the New Year as it reached the highs of its trading range. I sold these stocks at a nice profit after my technical sell signals signaled a warning. The Consumer Staples Select Sector SPDR ETF (NYSEARCA—XLP), which we still hold, is also coming off of a bottom. I think it’s going to move higher if markets get choppier over the next few months, which is why I put it on my ‘Top Picks’. So far, that recommendation appears to be working well.

■ Conglomerates: I covered the technical profile and trading zones of conglomerate stocks back in June. I think the conglomerates have been a bit overlooked in this market. We bought Brookfield Asset Management (TSX—BAM.A), and Fairfax Financial Holdings (TSX—FFH) in that group. But Power Corporation (TSX—POW) (which we hold in our Income Platform) is interesting for a dividend play, for those after that type of play.

This market is not an easy one for investors. What worked yesterday—sectors like banks, energy or technology—may cause damage today. Yesterday’s dogs, on the other hand, can become tomorrow’s heroes. You need to watch for the new wave of sector rotation. Only through careful analysis of chart formations and volume trends will you spot the beginnings of those rotations.

Keith Richards, Portfolio Manager, can be contacted at krichards@valuetrend.ca. He may hold positions in the securities mentioned. Worldsource Securities Inc., sponsoring investment dealer of Keith Richards and member of the Canadian Investor Protection Fund and of the Investment Industry Regulatory Organization of Canada. The information provided is general in nature and does not represent investment advice. It is subject to change without notice and is based on the perspectives and opinions of the writer only and not necessarily those of Worldsource Securities Inc. It may also contain projections or other “forward-looking statements.” There is significant risk that forward looking statements will not prove to be accurate and actual results, performance, or achievements could differ materially from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements and you will not unduly rely on such forward-looking statements. Every effort has been made to compile this material from reliable sources; however, no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please consult an appropriate professional regarding your particular circumstances.

This is an edited version of an article that was originally published for subscribers in the August 2018/First Report of The MoneyLetter. You can profit from the award-winning advice subscribers receive regularly in The MoneyLetter.